Green Mountain Shares Surge on Expanded Partnership with Starbucks
Shares of Green Mountain Coffee Roasters surged on Wednesday on news that the company had expanded its relationship with the world’s largest coffee shop chain, Starbucks. The stock had plummeted just over a week ago when Starbucks announced it was launching its own single-serve brewing system, and the company had not signed on to sell single-serve packs for Green Mountain’s newest brewing system, the Vue, which Wednesday’s announcement addressed.
Green Mountain’s stock, which had lost about 25 percent of its value since Starbucks announced it was entering the single-serve coffee market, rose more than 10 percent on Wednesday after the companies announced the expansion of their partnership. The two companies originally partnered last year to sell single-serve packs of Starbucks coffees for Green Mountain’s k-Cup brewing system, which Starbucks vowed to continue when it announced its own machine, the Verismo. What scared investors is that Green Mountain had not signed Starbucks as a partner for the Vue machine, causing investors to fear that the Verismo and Vue would be in direct competition.
Both companies have claimed all along that the Verismo is a high-pressure brewing system designed to make espressos for higher-end customers, so it would be marketed to a different consumer base than Green Mountain’s machines.